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What financial support is now available for businesses?

·3-min read

The Treasury has announced £1 billion of financial support for hospitality and leisure firms affected by the spread of the Omicron variant of Covid-19 in recent weeks.

Businesses have urged Chancellor Rishi Sunak for financial support after witnessing mass cancellations and dwindling footfall.

Hospitality trade bosses have said that many firms have seen takings in December, typically the busiest month for the sector, cut by about half.

Mr Sunak has now announced a number of potential schemes for firms in need of extra funding to keep their operations afloat.

He has also highlighted some remaining support measures and schemes which have been in place as a result of the pandemic.

Here the PA news agency looks at what support is available for firms:

– Hospitality and leisure grants

The Treasury has allotted £683 million of funding for targeted grants for hospitality and leisure businesses in England.

Businesses will be eligible for one-off grants of up to £6,000 per premises, the Government said.

– Additional grants

There will also be £102 million of funding made available for further grants, to be given by local authorities to other businesses affected by the pandemic.

This further funding is likely to made available to areas such as retailers, suppliers and landlords of affected firms.

About 200,000 businesses will be eligible for business grants which will all be administered by local authorities and will be available in the coming weeks.

Chancellor Rishi Sunak
Chancellor of the Exchequer Rishi Sunak spoke to businesses and industry leaders last week (Stefan Rousseau/PA)

– Sick Pay

The Government has said it will also cover the cost of statutory sick pay for Covid-related absences and medium-sized employers across the UK.

This will be handed out through the reintroduction of the Government’s statutory sick pay rebate scheme (SSPRS).

The scheme reimburses firms with fewer than 250 employees with up to two weeks of Covid-related sick pay per employee.

Firms will be eligible for the scheme from Tuesday and be able to make claims retrospectively from mid-January.

– Culture recovery funding

About £30 million of further funding will also be made available through the Culture Recovery Fund, enabling arts and culture organisations to access funding over the winter.

– Elsewhere in the UK

The Treasury announced £150 million for the devolved administrations.

The funding, which will be issued in relation to the Barnett formula, will comprise about £80 million for the Scottish Government, £50 million for the Welsh Government and £25 million for the Northern Ireland Executive.

– Existing measures

Mr Sunak has also highlighted a number of existing financial support measures for firms.

One of these is reduced business rates relief for retail, hospitality and leisure firms for the remainder of the financial year.

There will also be a 50% reduction in business rates for firms in these sectors in the 2022/23 financial year.

However, these reliefs will both have limited benefit for larger operators, with next year’s relief capped at £110,000 per business.

The Chancellor has also highlighted the rate of hospitality VAT, which at 12.5%, is lower than the 20% rate before the pandemic, although this increased from 5% in October.

Pub bosses have also said that VAT support only has a limited benefit when takings are heavily reduced, and no benefit when closures take place.

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